BP seeks rehearing in oil spill settlement dispute

NEW ORLEANS (AP) – BP on Tuesday asked an appeals court to review a ruling upholding a multibillion-dollar settlement to compensate victims of the company’s 2010 oil spill in the Gulf of Mexico.

In a filing with the full 5th U.S. Circuit Court of Appeals, BP argued that a divided three-judge panel from the court erred earlier this month when it affirmed a U.S. district judge’s approval of the company’s settlement with a team of private plaintiffs’ lawyers. The New Orleans-based appeals court has 14 active judges and eight senior judges who also hear cases.

BP argued that the panel’s Jan. 10 majority decision will force the company to pay hundreds of millions of dollars to businesses that weren’t harmed by the massive spill.

The company’s lawyers argue that the 5th Circuit panel shouldn’t have upheld U.S. District Judge Carl Barbier’s December 2012 certification of a class of “vast numbers of claimants … without regard to whether the class has been defined to include numerous members with no colorable claims against the defendants.”

“If the panel’s decision is permitted to stand, it will work a revolution in class-action law in this Circuit, permitting the certification of classes that cannot be certified anywhere else in the country,” BP attorneys wrote.

Plaintiffs’ lawyers have said BP simply undervalued the settlement and underestimated how many claimants would be eligible for payments. In a letter to the 5th Circuit dated Monday, plaintiffs’ attorneys said BP’s current position is that “some unknown and subjective standard” should be used to define class membership.

BP has argued that Barbier and court-appointed claims administrator Patrick Juneau have misinterpreted settlement terms in ways that would force the company to pay for billions of dollars in inflated or bogus claims by businesses. During a hearing in November, a BP lawyer argued that Barbier’s approval of the deal shouldn’t stand unless the company ultimately prevails in its ongoing dispute over business payments.

In October, a different 5th Circuit panel threw out Barbier’s rulings on the dispute over business payments and ordered him to change the calculation of some damages. Last month, Barbier rejected BP’s argument that the settlement shouldn’t compensate businesses if they can’t directly trace their losses to the spill.

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